Small competitive areas limit options during RIFs

By Bureaucratus

May 31, 1998

When agencies downsize, they classify employees in groups called "competitive areas" and forbid employees from competing for jobs in other areas. A decision by the U.S. Court of Appeals for the Federal Circuit [Case 97-3249; John J. Markland v. Office of Personnel Management, April 2, 1998] said agency managers may establish these competitive areas in small units, thereby limiting the number of jobs for which employees may compete.

A competitive area is a grouping within an agency in which employees must compete when the agency is undergoing a reduction in force (RIF). For example, if "Office A" is a competitive area, employees within the office can compete with each other for existing jobs. But employees in "Office A" cannot compete for a job in "Office B," even if they have better qualifications and more experience than any employee in "Office B."

John Markland was fired in OPM's RIF initiative. Following the agency's redesign in January 1995, OPM established 15 departmental service competitive areas, each of which corresponded to a subdivision of the agency's central office. Markland had been transferred to OPM's Office of Contracts and Administrative Services from the agency's Office of Information Technology in February 1995. In June 1995 OPM decided to conduct a RIF because of a lack of funding. OCAS eliminated Markland's position in July 1995 and notified him that his separation would be effective Sept. 29, 1995.

Markland challenged his separation on grounds that OPM failed to follow RIF regulations with respect to his competitive area, competitive level and assignment rights. He also protested that OPM officials knew his chances for surviving the upcoming RIF were slim and transferred him to OCAS in retaliation for whistle-blower activities in 1993.

Markland initially took his appeal to the Merit Systems Protection Board (MSPB). The board's initial decision by an administrative law judge held that OPM properly considered Markland's competitive area and level, did not violate his assignment rights and had not retaliated against him for whistle-blowing.

Markland appealed to the full board, arguing that the judge erred in denying his appeal. The board upheld the decision, and an appeal to the court followed.

The court noted that OPM had properly established regulations that all agencies must follow in conducting a RIF, including the requirement to establish competitive areas. The court cited regulations that said, "A competitive area must be defined solely in terms of an agency's organizational unit(s) and geographical location, and it must include all employees within the competitive area so defined."

There had been a broader definition of "competitive area," but OPM modified it in 1986. Since then, the agency's definition of a competitive area has allowed for increasingly smaller groups.

This was done to give management greater flexibility at the expense of employees.

Although OPM had abolished its Federal Personnel Manual, which contained rules for defining competitive areas, the court based its ruling on the defunct document. "Although the FPM was not in effect at the time of the OCAS RIF, it was [in effect] when OPM promulgated the 'competitive area' regulation at issue here," the court ruled. "Furthermore, we have previously found the FPM instructive in construing the meaning of competitive area."

The FPM had been abolished, but its message lived on.

Markland argued that the crucial factor for determining whether the head of an agency subdivision can take or direct personnel actions is whether he has appointing authority. The court didn't buy that. It said neither federal regulations nor the abolished FPM discusses appointing authority. Similarly, previous cases have not relied upon appointing authority in evaluating competitive areas, the court said.

"We are not persuaded that heads of competitive areas must have appointing authority in order for these competitive areas to be separate in personnel management," the ruling said. "Evidence of appointing authority may indicate that a subdivision head has authority to take or direct personnel actions, but it is not required."

In essence, the court ruled that competitive areas could be small units headed by a supervisor and need not be large units. This hurts employees because it prohibits them from competing for a wider array of positions. However, employee considerations obviously were not a factor in OPM's regulations or in the court's deliberations.

Accordingly, the MSPB's ruling was affirmed. And in the current downsizing environment, more federal employees are likely to encounter similar situations. What can they do about it? Very little.

The GAO director of information technology issues is leaving government after 16 years. On his way out the door, Dave Powner details how far govtech has come in the past two decades and flags the most critical issues he sees facing federal IT leaders.